Buying a Vehicle Takes Twice as Long as Consumers Think It Should
Almost two-thirds of new-vehicle buyers in the United States indicate that it should take no more than two hours to complete a vehicle purchase from the time they walk into the dealer showroom, according to the June 2015 PowerRater Consumer Pulse. However, industry data show that in practice, the median amount of time spent completing a new-vehicle purchase is four hours.
PowerRater Consumer Pulse is a monthly analysis developed jointly by J.D. Power and DealerRater, based on J.D. Power’s customer satisfaction research and DealerRater’s customer ratings and reviews of car dealerships. The June analysis shows that 67% of luxury and 62% of mass-market vehicle buyers indicate it should take no more than two hours to complete a vehicle purchase from the time they enter the showroom. Half of buyers from each segment indicate the ideal duration is between one and two hours.
According to the J.D. Power 2014 U.S. Sales Satisfaction Index (SSI) Study,SM buyers who use the Internet to shop for their new vehicle prior to visiting the dealership spend more time overall completing their purchase than those who don’t research online. Additionally, buyers who use the Internet are more than twice as likely to have compared prices from different dealers, and are more likely to know the expected price before they visit the showroom.
According to the 2014 SSI Study, the average vehicle buyer’s in-dealership experience consists of 60 minutes for selecting a vehicle; 60 minutes for negotiating the deal; 30 minutes to discuss and sign the necessary paperwork; and 30 minutes to take delivery. The remainder of the overall time is spent waiting before and after the paperwork process: a key area for dealership personnel to focus on when creating a more seamless and efficient process flow.
“From a generational standpoint, Gen Y buyers spend more time negotiating than other generational groups, as they are more likely than the other generations to conduct research online prior to purchase and to have concerns regarding affordability, which emphasizes the importance of the negotiation phase for Gen Y,” said Chris Sutton, vice president, U.S. automotive retail practice at J.D. Power. “Both Gen Y and Gen X buyers spend less time taking delivery, likely because they need less instruction on the features and functionality of their new vehicles.”
According to Sutton, “It’s important for dealers to be efficient with customers’ time. Customers will value specific parts of the process, such as finding the right vehicle, understanding features and controls and understanding how much and for what they’re paying. The dealer needs to strike an effective balance between educating the customer and efficiency.”
The 2014 SSI Study data finds that time spent in the dealership has a significant impact on overall customer satisfaction. While satisfaction among new-vehicle buyers who spend less than two hours in the dealership averages 861 on a 1,000-point scale, satisfaction declines to 844 among those who spend between two and three hours in-dealership and drops to 807 among those spending four to five hours to complete the purchase process.